The Eleventh Circuit Court of Appeals Affirmed Dismissal

The Eleventh Circuit Court of Appeals has affirmed the dismissal of a patronage capital credit putative class action against Central Alabama Electric Cooperative on the ground that it failed to state a claim upon which relief could be granted under Alabama cooperative law. The unanimous panel decision held that “While [Ala. Code] § 37-6-20 requires that excess revenues be distributed, Caver’s claims ignore how § 37-6-20 provides that the manner of distribution of patronage refunds is determined by a cooperative’s bylaws. To be clear, our narrow holding here is that § 37-6-20 does not require CAEC to distribute patronage refunds only in a cash payment manner.”

The court also held that CAEC’s removal of the case to federal court under the federal officer removal statute (28 U.S.C. § 1442(a)(1)) was proper.

Rushton Stakely shareholders Dennis Bailey, Mac Freeman and Evans Bailey represented defendant Central Alabama Electric Cooperative at the district court level where they secured a dismissal and briefed the appeal before the Eleventh Circuit. Dennis Bailey presented oral argument to the panel for the cooperative.